Dow falls more than 440 points to continue second quarter’s weak start

Stocks fell Tuesday morning as investors continued to worry that the Federal Reserve could cut interest rates later than expected.

The Dow Jones Industrial Average dropped 418 points, or 1.1%, on Tuesday after declining more than 500 points at its lows. That means the blue-chip index has sunk roughly 800 points during the first two days of the second quarter. On Tuesday morning, the S&P 500 fell 1.1% and the Nasdaq Composite lost 1.5%.

The Personal Consumption Expenditures price index, the Fed’s preferred inflation gauge, rose 2.5% for the 12 months that ended in February, a faster clip than January’s price increase.

Fed Chair Jerome Powell last Friday warned that rate cuts won’t be imminent.

“We don’t need to be in a hurry to cut,” he said at an event hosted by the San Francisco Fed.

That send bond yields rising. By Tuesday, the 10-year Treasury yield was at 4.38%.

Traders pulled back their expectations for a rate cut in June to about 62% from more than 70% a week earlier, according to the CME FedWatch Tool.

This is a developing story and will be updated.